Out of intraday trade setups today, we traded just one. The Yen pairs were going crazy in the Asian session, and have been dropping like a stone. We managed to catch the GBP/JPY – and did not anticipate such a large move.

The Divergence was certainly there – a Bearish Divergence. We entered our Short trade based on our Fibonacci Fan levels, and price went far beyond the expected target levels. We did not ride the price all the way down, however. This trade was a good example in the room of the effectiveness of Fibonacci Fans in general, and how to use them. Read the rest of this entry »

There were a couple of intraday trades today, which we will go over before following up on the long term trades which we are into up to now.

On the GBP/CHF we identified a Bearish Divergence, which contributed to a Short trade, as pointed out by one of our members. The price made higher highs, stochastics made lower highs, and the lower high on the stochastic was quite below the overbought level of 80. This means the momentum has been decreasing in this rally of price which gave us the second high. This signifies a change of trend. This was a nice divergence, and we went in according to our divergence trading rules.

We plotted our Fibonacci Fans, and also used other fib projections to get our targets for a technically correct and profitable trade. Read the rest of this entry »

Mondays usually are slow days and we wait for the technicals to settle down before we think of following up with the last week’s trades or looking at intraday. But on Mondays we do look forward, as we get the technical setups for Gap Trading.

The gaps are not present on forex as much as other markets, as it is a continuous market, but on Mondays the market can open with a gap, and currencies will give you excellent setups. Gap trading techniques are very effective. Lets have a look at one of the currencies which gave us an excellent one today.

The NZD/USD gave us a gap, though not a very large one – usually the larger the gap, the larger the move. We wait for the market to come back down to fill the gap, and went in Short upon a Bearish Divergence, expecting the price to fill the gap, which it did. The gap turns into a kind of channel, and price found support at this level. A nice Short trade on the NZD/USD, without all that much effort, which is the main advantage of gap trading. Read the rest of this entry »

Lets go over the long term things first which we’ve been following. On the GBP/USD, we were looking for a breakout on the daily timeframe from a Bullish Flag Formation. Price has been moving with lots of upwards momentum, and so far has remained above the mid channel of the flag. We were expecting a breakout this week, but it has not yet taken place. We have a penetration, but not a close.

On the intraday timeframes we did have an indication that today we might not get the close that we are looking for, because we had a Bullish 1-2-3 Formation. As I always say, “give me a 1-2-3 formation, and I can give you the targets”. We plotted Fibonacci Expansions to determine our targets, and price was rejected at the 127 level, so we do expect some retracement. Today is just not the day for the breakout. Lets see how it goes. Monday we do expect strong upmoves on the GBP/USD. Read the rest of this entry »

As I always say, its the procedures and technique that are more important than the result of a trade. I know we are all here to trade and win, but ultimately its the procedure that counts more – how you go into the trade, how you analyze it, how you plan your exit. We’ll go over a few setups from today and the techniques which we used to analyze them.

Lets start off with one of the setups we managed to catch in time that is going so far in our favor.
On the GBP/CHF we were looking at a Regular Bearish Divergence, with price making higher highs, and stochastics lower highs. Based on our procedure we calculate our targets using Fibonacci projections on the last move down. So far its on a pause, but expect further moves down. Read the rest of this entry »

The pair found some strength and started slowly to rise, yesterday it printed a green bar on the daily charts and so far today is doing the same thing, on top of that it took out the previous high at 1.4240. Looking at the daily charts below we can clearly spot the next bullish target which is the current YTD high at 1.4300, a move above that will most likely aim for the 1.4500 round number, a level seen by many traders as a reasonable long target. Like we said the overall trend bias is still bullish but just in case we witness a sharp reversal one should pay attention at the 1.4140 support area which is the closest one before the 1.4000 round number and the up sloping trendline we have on our charts.

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